Final and Interim Rule Ensures Access to Affordable Coverage Under Medicaid and CHIP

Friday, March 16, 2012

Final and Interim Rule Ensures Access to Affordable Coverage Under Medicaid and CHIP

A final and interim rule issued today by the Centers for Medicare and Medicaid Services (CMS) updates regulations to include the new Medicaid coverage groups created by the Affordable Care Act (ACA), simplifies eligibility policy for Medicaid and the Children's Health Insurance Program (CHIP), streamlines the eligibility and enrollment processes, and coordinates eligibility procedures with those of the Affordable Insurance Exchanges (Exchanges).

Beginning in 2014 when Exchanges begin operation, Medicaid coverage will be extended to all individuals between ages 19 and 64 with incomes up to 133% of the federal poverty level, or $14,856 for an individual and $30,656 for a family of 4. This group is termed those "newly eligible" for Medicaid. Children will remain eligible for either Medicaid or CHIP at higher income levels based on the eligibility standards already in effect in their state. New federal matching rates will provide 100% federal funding for newly eligible individuals for 3 years (calendar years 2014-2016), gradually reduced to 90% in 2020, where it remains permanently.

As outlined in a rule released earlier this week, Exchanges must offer essential health benefits (EHB), which include the category of "rehabilitative/habilitative services," to beneficiaries. The "newly eligible" group of Medicaid beneficiaries must receive benefits that include EHBs; however, details of this will be addressed in future rulemaking.

The rule provides 2 ways for Exchanges to perform Medicaid-eligibility evaluations: (1) the Exchange can determine Medicaid eligibility based on the state's Medicaid eligibility rules and also determine eligibility for advance payment of premium tax credits; or (2) the Exchange can make a preliminary Medicaid eligibility assessment and rely on the state Medicaid and CHIP agencies for a final eligibility determination.

The rule also simplifies financial eligibility by relying on a single "Modified Adjusted Gross Income" (MAGI) standard for determining eligibility for most Medicaid and CHIP enrollees and by consolidating eligibility categories into 4 main groups—adults, children, parents, and pregnant women. People eligible under the new MAGI-based category will be promptly enrolled in Medicaid.

In response to public comments, the rule clarifies that people with disabilities or in need of long term services and supports may enroll in an existing Medicaid eligibility category to ensure that they are quickly enrolled in coverage that best meets their needs.

CMS issued several provision of this rule on an interim final basis and, therefore, is seeking stakeholder input on them. These include safeguarding information on applicants and beneficiaries, timeliness and performance standards for Medicaid, timeliness standards for CHIP, and coordinated eligibility and enrollment among insurance affordability programs. APTA will review this rule and post a summary to its Web site in the near future. The association also will submit comments on the interim rules as necessary.